Observation (CEACR) - adopted 2002, published 91st ILC session (2003)

Social Security (Minimum Standards) Convention, 1952 (No. 102) - Netherlands (Ratification: 1962)

With reference to its previous comments, the Committee notes the information supplied by the Government in its report on the Convention for the period from 1 June 1996 to 1 July 2001, as well as in its annual reports on the application of the European Code of Social Security (ECSS). The Committee also notes the supplied brochures "A short survey of social security in the Netherlands, January 2001", "The Dutch disablement benefits system", and the report prepared for the Parliament "Efforts to reintegrate the unemployed: An overview".

Part III (Sickness benefit) and Part IX (Invalidity benefit) of the Convention in relation to Part XIII (Common provisions), Articles 71 and 72. In its previous comments, the Committee examined the implementation of the 1996 reform of the Civil Code, under which the responsibility for the payment of sickness benefit in the form of wages for a maximum of 52 weeks was transferred from the social security system to enterprises, in the light of the general principles concerning the organization and management of social security schemes laid down by the Convention. Describing the aims of the reform in its report, the Government states that the new law introduced a system of free market forces in respect of the Sickness Benefits Act (ZW), which had thus been privatized to a large extent. Employers could decide whether to bear the risk of paying wages to sick employees themselves or reinsure the risk with private insurance companies. Sickness benefit under the ZW was maintained as a safety net in cases where the employer could not be held responsible for the payment of wages to sick employees. In 1998, the privatization of the sickness benefit scheme has been followed by similar measures as regards the invalidity benefit scheme introduced by the PEMBA Act, which changed the manner of financing employers’ contributions under the Disablement Benefits Act (WAO). As explained in the brochure "The Dutch disablement benefits system" (on pages 5 and 7), "in Dutch, PEMBA stands for: contribution differentiation and market forces in connection with disablement benefits". The employer may choose either to pay the differentiated contribution to the social insurance agency, or to bear the risk himself by paying the disablement benefit for the first five years of invalidity of his employee, or else to cover that risk by taking out insurance with a private insurance company; the Government’s intention here being "to allow market forces to take effect (competition)". As in the case of the reform of the sickness benefit scheme, the implementation of the PEMBA Act has been also closely followed by the Committee in its previous conclusions under the ECSS in view of the similar risks of health becoming a criterion of selection in recruitment and the breach opened in the collective nature of the financing of the invalidity branch. It notes from the Government’s 35th annual report on the ECSS that, in 2001, there were still only 3,417 (1,612 in 1999) employers with fewer than 15 employees and 836 (536 in 1999) employers with at least 15 employees who had decided to take out a private insurance under the PEMBA Act to cover the risk of invalidity directly. To monitor the spread of the reforms and the redistribution of responsibilities in the private sector, the Committee would be grateful if the Government would continue to provide statistics in future reports indicating the number of enterprises which have decided to assume the risk of invalidity or sickness of their employees themselves, as well as the number of enterprises which have decided to take out collective insurance for these risks with private insurance companies, including the total number of employees employed by such enterprises. The Committee would also like to be informed of the regulatory and supervisory measures taken by the State in compliance with Articles 71(3) and 72(2) of the Convention to ensure the financial viability and proper functioning of the private insurance companies providing sickness and disability benefits.

The Committee recalls that both reforms were undertaken to encourage employers to prevent and reduce the number of days of absence caused by sickness and disablement of their employees and that, in view of the much greater numbers of workers unavailable for work due to these reasons in the Netherlands than in the comparable countries, it was expected that the market forces and competition would prove to be more effective in achieving this goal. At the same time, the Government has taken care to maintain the basic social security benefits provided under the ZW and WAO in all cases in which the employers and market forces fail to produce the desired effect. Moreover, the entitlements of the persons protected to these benefits have been safeguarded by a number of additional legislative measures reported by the Government, which have been gradually put in place to mitigate the negative effects of the market forces, which tend to discriminate against the weak and vulnerable and undermine the basic spirit of solidarity inherent in any social security system. The Committee is bound to observe that the resulting reforms to the sickness and disability benefits schemes intended to harness the positive effects of privatization and market forces, while containing their negative effects within the basic social security framework, has no comparison in the history of social security in Europe. It is thus only natural that they pose many new problems of organization and governance of such mixed social security systems, particularly during the transition period, when the new forms of state supervision of the system, the democratic participation of the persons protected in its management, the redistribution of the risk, financial burden and responsibility in society, and the principles of non-discrimination and solidarity with the most vulnerable groups are consolidated. The Committee wishes to recall that, while there is no single right model of social security, all systems should conform to certain basic principles of good governance and social cohesion, the observance of which comes under the general responsibility of the State established in Articles 71(3) and 72(2) of the Convention. Moreover, it is during such periods of reforms and transition that the responsibility of the State takes on particular importance for the future development of social security, including at the international level. In view of the profound and continuing nature of the social security reforms in the Netherlands, the Committee would like the Government to provide in its next report, with reference to Parts III, IV and V of the report form on the Convention, an in-depth explanation of its strategy and reform policies, highlighting the principles on which the new design of the sickness and disability schemes is based, the difficulties encountered in the reform process and the major decisions handed down in this respect by courts of law and other tribunals.

With regard more particularly to Article 72(1) of the Convention, which provides for the participation of the representatives of the persons protected or their association in a consultative capacity with the management of the social security system, the Committee recalls that, at the national level, workers’ organizations participate in the National Institute for Social Insurance (LISV) and in the sectoral councils, as well as in the negotiation of collective agreements regarding sickness benefit; at the company level, employees’ councils are fully associated in determining the respective procedures by mutual agreement with the employer; and at the individual level, the persons protected have recourse to an independent medical expert or Arbodienst (occupational health and safety service) and participate in the establishment of plans for their reintegration into active employment. In addition, the Government indicates in its 35th report on the ECSS that, as from 1 January 2002, there have been fundamental changes in the implementation of the social insurance schemes for employees, as well as for the disabled self-employed persons and young handicapped persons. In particular, the agencies responsible for administration of employees’ insurance schemes have been united into a single central organization (UWV). In order to guarantee the adequate participation of employees, employers and municipalities, the Board of Work and Income (RWI) has been created, which advises the Minister of Social Affairs and Employment on matters related to labour and income and provides subsidies to branches and companies to promote the reintegration of unemployed persons and social security beneficiaries. The Committee notes these new developments with interest and would like the Government to be asked to supply more details on the role played by the representatives of employees in the newly created bodies, as well as to indicate other measures taken or contemplated to further promote a strong role for workers’ organizations and the participation of the representatives of the persons protected at the various levels of management, particularly in relation to private benefit providers.

With regard to the guarantees intended to prevent the most vulnerable groups of the population from suffering discrimination which are inherent in the system of the collective financing of risks, as set out in Article 71(1) of the Convention, the Committee recalls that protection for workers with a previous medical history against discrimination in access to employment is offered by the Medical Examinations Act of 1998, which also prohibits medical examinations and the selection of personnel in connection with the private insurance taken out by employers to cover the financial risks engendered by the sickness of their personnel. With regard to the protection of sick workers in employment and against the loss of their jobs, reference should be made to the obligation of all companies to be affiliated with a certified Arbodienst, to draw up reintegration plans for employees suffering prolonged illness and to have recourse to the assistance of Arbodienst for the reintegration of such employees. Under the Reintegration of the Work Disabled Act (REA), which came into force on 1 July 1998, employers do not have to pay the sick employee’s wages if the re-employed disabled person falls ill during a subsequent period of five years, during which she/he will receive sickness benefit from the social security agency. The report prepared for Parliament "Efforts to reintegrate the unemployed: An overview", and supplied by the Government with its report, describes increased policy measures adopted in 1999 for the integration into employment of persons in a vulnerable position on the labour market, including persons incapacitated for work. The Committee notes in particular the proposed new rules for the exchange of data between the employer, the Arbodienst and the social security agencies during the first year of an employee’s sickness, the objective of which is the more rapid and effective reintegration of sick unemployed persons and a reduction of the inflow of new beneficiaries into the disability benefit scheme (implementation of the new "gatekeeper model"). In this respect, the Government indicates in its 35th report on the ECSS that the protection of sick workers has been strengthened by the entry into force on 1 January 2002 of the Gatekeeper Improvement Act (Wet Verbetering Poortwachter), which obliges the employer to report cases of employee illness to the Arbodienst and, on the basis of the problem analysis prepared by the Arbodienst in the sixth week of illness, to draw up in writing a reintegration plan in agreement with the employee concerned. The Committee further notes from the above parliamentary report (pages 44-45) that the Secretary of State is preparing a legislative proposal to improve sick leave supervision in the first year of sickness and that the evaluation of the achievements under the REA is due in 2000. It hopes that the Government will include information on the progress made in this respect in its next report.